Russia expects vehicle scrappage fee revenues to rise despite drop in sales

Group 1 - The Russian government anticipates a significant increase in budget revenues from car scrappage fees, projecting nearly 1.65 trillion roubles ($19.71 billion) for 2026, a 46.7% rise from the 1.12 trillion roubles expected for 2025 [1] - As of September 23, 2023, the government has collected only 267 billion roubles in scrappage fees this year, indicating that future revenue growth will depend on annual fee indexation and a recovery in vehicle production [2] - Industry analysts predict a 25% decline in car sales for 2025, following a two-year recovery that began in 2023, with sales down 23% year-on-year to 773,264 units in the first eight months of 2023 [3] Group 2 - The Russian industry ministry has proposed a new methodology for calculating scrappage fees starting in November, which may lead to increased fees for certain expensive vehicle types [4] - Domestic manufacturers receive state subsidies to offset scrappage fees, contributing to rising car prices and a contracting market [4]